Garmin, Telecom News, ET Telecom
NEW DELHI: The US-based technology company Garmin said that it has grown across operating verticals, and is eying a double digit growth in CY 2022 and 2023, and added that the proposed production-linked incentive (PLI) scheme would help country become a global manufacturing hub, and create new job opportunities. In an interaction with ETTelecom’s Muntazir Abbas, Ali Rizvi, Director, Garmin India talks about the company’s roadmap, R&D, and headcount growth. Edited excerpts.
What are your broad verticals, and what is the revenue percentage of each of it, contributing to overall Garmin income?
Garmin offers a broad range of solutions across sectors to deliver value, high performance, ease of use, innovation, and ergonomics to our customers. We operate primarily across 5 major sectors, namely, aviation, marine, automotive, outdoor and fitness. Over the years, we’ve built up our expertise as a brand in all these sectors, owing to our constant research and focus on refinement of technology which has helped us scale new heights in our journey.
For the fitness and outdoors segment, our watches provide the most accurate data in the market making and actively offer in-depth insights that allow the athletes to modify their training regimen as per the need. For the pilots, the Garmin Fenix, one of our premium smartwatches, has become a very effective tool to ensure the safety of the US Navy by monitoring the cabin pressure and issuing relevant warnings to the pilots.
Regarding our market share across the aviation sector, we can say about 90% of non-airline small planes use Garmin flight systems. In terms of revenue, the fitness and outdoor segment contribute a major chunk to our revenue, at about 57% (fitness: 31% and outdoor: 26%) while aviation contributes around 14%, marine around 17%, and auto at 12% .
What are the trends you are observing in health and fitness accessories worldwide and in India?
As consumer needs continue to evolve, smartwatches have kept pace in terms of functionality and overall purpose. When fitness trackers were initially introduced across the globe, their functionality was limited to their name, ie tracking fitness. They primarily served as pedometers and helped in counting steps with a certain degree of accuracy.
Over a period of time, consumer needs and preferences changed, the community started demanding more features like, heart rate tracking, sleep track, calculating calories, long battery life, GPS, solar, compatibility with Android and iOS, and more.
Currently, the consumer wants as much functionality from their wrist-bound gadget as possible and the technology is constantly offering new ways to deliver the most for our customers – starting from providing notifications, accessing and sending reminders, controlling the music, clicking pictures to voice calling.
The fitness and wellness aspects are also constantly evolving and we have devices that track everything from steps, 24/7 heart rate and SpO2 monitoring, Workout regimen all the way to tracking sleep and sleep patterns. Technology is constantly evolving and smartwatches and fitness trackers are no exception to the trend.
What is the percentage breakup of your government, enterprise and consumer businesses?
Our consumer business, which comprises our outdoor and fitness segments, is the major driver in terms of contribution towards our business growth. Marine, Aviation, and Auto segments are primarily focused on B2B business and the Outdoor and Fitness segment are more focused on consumer business. However, we also have some business in government and enterprises through the outdoor and fitness segment. Our revenue from the marine segment grew 14% in the fourth quarter, 2021 followed by 21% in the auto segment, 13% in the aviation segment. However, the revenue from the outdoor segment decreased 8% primarily and revenue from the fitness segment was flat in the same quarter, with growth in advanced wearable products offset by reduced sales of cycling products.
What is the product range/variants you have in your portfolio?
We have a vast array of products across all sectors specifically designed to provide the best data for the activity of their choice in the wellness, outdoor, and fitness categories. In the fitness category, the Forerunner series is perfect for professional runners and offers detailed data to create the perfect training regimen. For outdoor enthusiasts, Fenix, Epix series and the Instinct series are the perfect devices with long-lasting battery life, solar charging capabilities and a functioning GPS. From a wellness perspective, Garmin also offers a wide range of products such as Venu, Venu2, Venu2Plus smartwatches and the Vivomove Series, Lily hybrid watches and Vivosmart fitness band. These devices provide a wide array of wellness features including 24hour active heart rate monitoring, Sleep tracker, Body Battery energy levels, all-day stress, hydration, health snapshot and women’s health.
How much growth target are you expecting in CY 2023 as compared to CY 2022?
We recorded a double-digit revenue growth in India, backed by a popular range of smartwatches in the fitness and wellness segment in 2021. We expect the same double-digit growth in the years 2022 and 2023. The pandemic pushes the growth of this segment and created a major perception shift in the population regarding health and fitness. We expect this trend to continue further since it’s becoming a bigger concern on a regular basis for all people. Also, there was a 124% growth as per Garmin Connect Data in India in 2021 compared to 2020 in the Garmin VENU smartwatch. This shows that fitness and wellness is one of the most popular segments of Garmin in India.
With AI, ML on the back of 5G services rollout, do you expect uptake of smart lifestyle accessories such as watches may increase? How much is it estimated, and by when?
5G is expected to unlock ultrafast data speeds, low-latency and stable connectivity and make devices smarter. However, when it comes to smart wearables like smartwatches, the technology has a different appeal. 5G technology is likely to help decrease the latency in the interaction between two devices which would make the exchange of data exponentially faster. Another major benefit of 5G connectivity for wearables will be reducing the heavy lifting they’re required to perform. And that will be accomplished partly by mobile edge computing, or MEC, a technology that goes hand-in-hand with 5G. MEC allows complex functions to be performed closer to the user, and away from decentralized servers, which reduces network latency and enables near-real-time execution. Seize to the core of Garmin, we are expecting with 5G, we could strengthen the safety feature and health tracking system to our users when they are challenging both indoor and outdoor activities and even in their daily life. Most importantly, continuously providing them the best-in-class battery life to support their journey.
How robust are your distribution networks both online and offline? With how many channel partners and service centers do you operate?
Garmin devices are easily available both offline and via online channels. On the offline front, our products are available at all Croma, Decathlon- Bangalore, Helios, Just In Time and general trade stores across the country apart from the Garmin brand stores. Our devices are also available on major e-outlets, like Amazon and Flipkart along with, Tata Luxury Bajaj, Tata Cliq, Nykaa and Synergizer. We also have a robust network of service centers in Delhi, Mumbai and Bangalore to provide the best after-sales and service experience to our customers.
Your views on the production-linked scheme (PLI) scheme for wearables?
The PLI schemes are a great way to bring in outside investments to the country and we think it’s quite a good initiative from the government’s end, and definitely help the country become a global manufacturing hub further creating new jobs and opportunities for the Indian citizens. It’s quite a promising proposition and we look forward to the impact it has on the economy.
What is your headcount in India (and globally)? Do you have plans to further extend it?
We can safely say that we would not be able to do what we do without the support of our more than 19,000 employees across 83 locations worldwide. In India, we have around a decent number of employees. We are planning to further expand our operations and add to our headcount as we continue to grow in the Indian market.
How many patents do you file annually, and how much do you hold presently?
We are, at our core, powered by our innovation and inventions. We have quite a lot of patents for multiple technological advances. For example, we hold over 30 patents to optimize our solar power modules in our unique power glass solar charging technology that you can find in a lot of our devices. Similarly, there are quite a few innovations and we ended up investing in quite a few patents while perfecting those features.
What is your annual R&D spend?
Research and development are at the cornerstone of everything we do. We believe that our continued success depends on the intellectual skills of our employees and their ability to constantly innovate. We endeavor to provide the best possible technology to our customers across the world. Garmin reserves around 20% of net sales every year in R&D expenses (17% as of 2021 as per shown on financial report). We have our roots in engineering and we strongly believe that in our continuous pursuit of accuracy and high standards on our products, we can create the most reliable environment which allows our users to pursue their passions and challenge themselves fearlessly.
What is your market share in India and globally? Who are your top two closest competitors?
It’s hard to specifically pinpoint a number in terms of our total market share considering the diverse nature of our offerings and the sheer number of sectors we are currently in. Take our aviation segment for example, we have over 90% market share in business aircraft. Among runners, we currently stand in the lead around the globe. Our devices are focused more on providing accurate data and serve more like a health and training partner or a coach on your wrist than just a smart device.